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November 1, 2018

Advertisers, What’s Your Real Reach & Frequency?

Advertisers—who pay scant attention to what media audience stats actually mean—have become accustomed to media plans indicating that they are reaching lots of customers on a frequent basis. The reach projections, particularly for TV, have declined somewhat from the heady pre-fragmentation days of the 1960s and 1970s. However, they are still impressive, with 60-70% a typical monthly estimate.

But is it really true?

What happens when you look at a planned media buy or a total media plan in terms of likely ad noting, not merely the theoretical opportunity to see?

To demonstrate, let’s take a hypothetical national media buy involving a total yearly ad budget of $36.5 million for “Brand X.” The brand’s standard media buying demo is adults 18-49, which is utilized primarily in its participation in the parent corporation’s upfront TV purchases, as well as in its magazine and digital video buys. As shown in Table 1, 69% of Brand X’s dollars go to TV on the broadcast networks, cable and syndication in various dayparts, while magazines get 6% and digital video 25%. The average cost per rating point varies from a low of $21,000 for TV, to $36,000 for digital video. All told, the annual 18-49 GRP totals for this plan add to 1,546, with 1,200 derived from TV (see Table1).

Of course the GRPs shown in Table 1 are “raw” audience- or “impression”-based and do not account for repeat readings of magazines or ad exposure for all three media. So adjustments are needed to bring the “raw” GRPs into line with reality. In the case of TV, its 1,200 annual GRPs, based on Nielsen’s average minute commercial ratings, must be reduced to account for the fact that, on average, 8-10% of the “audience” is not even in the room when the ad airs, while another 35-40% isn’t paying attention. Therefore, we have reduced TV’s 1,200 GRPs down to 660 to reflect probable ad noting.

In the case of magazines—all monthlies—two factors are at play. The first is additional ad page exposures caused by repeat readings of the issues, which obviously increases the GRP totals. But on the other hand, the second factor is that it is unrealistic to assume that page openings equal ad noting. The net result of using both factors is a slight increase in annual GRPs from 96 to 108.

Digital video’s GRPs can also be calculated, assuming a 100% viewability factor, but a reasonable guess is that only 40% of these “exposures” actually result in a user noting the ad. Therefore, digital video’s effective ad viewing GRPs are marked down from the “raw” estimate of 250 per year, to only 100.

Needless to say, Brand X is also concerned with the extent of its reach based on likely ad viewings, not potential audience. Table 2 shows how Brand X’s campaign would unfold on an average day, week, month and annually, in terms of effective ad noting and reach. As can be seen, if this were a continuous 52-wek effort, rather than a flighted one, Brand X would reach only 2% of all 18-49s per day, 13% per week, and 43% per month. Over the course of a year, however, it’s probable ad reach would expand into the mid-80s.

To demonstrate how misleading reach estimates are using raw audience data, Table 3 compares Brand X’s estimated reach and average frequency among 18-49s on a monthly basis using raw versus noting adjusted ratings. While the raw projections yield a 62% reach factor among 18-49s, which is quite a comfortable place to be for many brands, in reality only 43% probably sees the brand’s ads over a typical four-week interval. Unfortunately, this more realistic kind of analysis is rarely if ever shown to ad agency clients, including Brand X’s.

Isn’t it about time that media planners explained the realities of audience projections and ad exposure to advertisers, to demonstrate how many “contacts” their ad campaigns actually generate? And once this sinks in and advertisers see how puny many of their “mass reach” media plans actually are, might this not make them more open to a) spending more on advertising and b) varying their media mixes—and, in the case of TV, their network type/daypart selections—to generate more read world ad reach and ad exposures?

We think so.

Stay tuned for more of this type of analysis in the forthcoming TV Dimensions 2019. Fully revised and updated, pre-sales of the new edition at a discounted pre-publication rate will begin later this month. TVD19 is slated to be released in late-January 2019.


David Weitzman
Nov 01, 2018

Thanks - this is a really interesting analysis. I do think that many of the industries current RF tools tend to over-inflate RFs, sometimes to the point where they really strain credibility (especially if you ever look at doing it locally i.e. Marketmate).

A few thoughts:
- It would be interesting to see what the reach curves look like once you factor in your adjustments, or if they are simply lower by a set % (are there new points of diminishing returns or are they in the same initial TRP levels)
- I'm having a hard time with your Digital GRP assumptions, only counting 40% seems too low when you are counting 55% of TV GRPs. Since you are assuming premium OLV based on pricing + 100% viewability, I think with the current ad models (lower ad loads, targeted relevant ads, shorter ad formats, nonskippable inventory) you shouldn't lose nearly as much as you do with Traditional TV (I could get there if you were assuming a $10K CPP but w/$36K you should be getting the good stuff)
- I think what you end up doing is tightening the spread between Traditional TV CPPs and Premium OLV CPPs (your analysis currently does the opposite)
- TV TRP benchmark development is the key, if based on an MMM analysis then this won't change the approach (b/c it is GRPs vs. sales impact - its just saying the business responds to a lower reach threshold than initially considered)
- With other ways to set benchmarks (category competitive, historical levels, industry benchmarks, etc) this needs to be considered further - the question I'd have is how much have those figures changed YOY or over the past few years - if we assume its accelerating then it matters a lot more than if this has been relatively constant over the past 1-3 years

Again - Interesting analysis!! Look forward to the next issuance!

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